Fidelity has a long history of helping people meet their
We're
financial goals. We have a range of brochures about our
products and services and a number of free guides on
key investment topics. Please contact us if you would like
The Fidelity
here copies of any of these publications or more information.
to help
SIP Guide
[Link]
1800 2000 400
This brochure is for the purpose of providing information about Fidelity and general information about mutual funds. Risk Factors: Mutual funds,
like securities investments, are subject to market risks and there is no guarantee against loss in the scheme or that the scheme’s objectives
will be achieved. • As with any investment in securities, the NAV of the Units issued under the scheme can go up or down depending on various
factors and forces affecting capital markets • Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future
performance of the scheme. Please read the Scheme Information Document and Statement of Additional Information carefully before investing.
Statutory: Fidelity Mutual Fund (‘the Fund’) has been established as a Trust under the Indian Trusts Act, 1882, by FIL Investment Advisors (liability
restricted to Rs. 1 Lakh). FIL Trustee Company Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the
Trustee to the Fund. FIL Fund Management Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the
Investment Manager to the Fund. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and F symbol are trademarks of FIL
Limited. CI02336
We all need to provide for something. It could be
children's education, buying a home or planning a
Think big. comfortable retirement. But how do you get started,
especially if you don't have a large sum of money?
Start small The simple solution is to begin a SIP or Systematic
Investment Plan. Just as you can buy a car or a home
by paying monthly instalments, you can invest as little
as Rs 500 at a time for your future and benefit from the
growth potential of mutual funds.
1. Why choosing a SIP Page 4
is a smart move
2. Tame stock market volatility Page 7
with a SIP
3. Discipline is the key Page 9
4. Start early Page 11
3
We all need to provide for something. It could be
children's education, buying a home or planning a
Think big. comfortable retirement. But how do you get started,
especially if you don't have a large sum of money?
Start small The simple solution is to begin a SIP or Systematic
Investment Plan. Just as you can buy a car or a home
by paying monthly instalments, you can invest as little
as Rs 500 at a time for your future and benefit from the
growth potential of mutual funds.
Contents
1. Why choosing a SIP Page 5
is a smart move
2. Tame stock market volatility Page 7
with a SIP
3. Discipline is the key Page 9
4. Start early Page 11
3
If you want to put aside just a small amount regularly,
1. Why you can plan a SIP as part of your monthly budget. In
fact, using an auto-debit facility can make for investing
convenience. On the other hand, if you have a lump sum,
choosing but do not want to commit all of it, a SIP can be a smart
move. Not only does it help you to build your portfolio
a SIP is a one step at a time, it also helps you to ride over market
volatility and benefit from 'rupee cost averaging': If the
smart move market goes up, the units you own will increase in value.
If it goes down, your next payment will buy more units.
The power of rupee cost averaging
LUMP SUM INVESTOR REGULAR SAVER
Month Unit Price Amount Units Amount Units*
(Rs.) Invested (Rs.) Bought Invested (Rs.) Bought
1 20 60,000 3,000 10,000 500
2 18 - - 10,000 556
3 14 - - 10,000 714
4 22 - - 10,000 455
5 26 - - 10,000 385
6 20 - - 10,000 500
Total invested (Rs) 60,000 60,000
Average price paid (Rs) 20 19
Total number of units bought 3,000 3,110
Value of investment after 60,000 62,200
six months (Rs)
The table above illustrates the power of rupee cost averaging. It compares the returns achieved by a lump sum investor and someone who saves
the same amount every month for six [Link] regular saver finishes with an investment that is worth more than the lump sum investor’s after
six months - even though the starting price, finishing price and average price are exactly the same. It sounds unlikely but it’s true. Check the
figures yourself. This example uses assumed figures and is for illustrative purposes only. * Fractional units ignored.
5
If you want to put aside just a small amount regularly,
1. Why you can plan a SIP as part of your monthly budget. In
fact, using an auto-debit facility can make for investing
convenience. On the other hand, if you have a lump sum,
choosing but do not want to commit all of it, a SIP can be a smart
move. Not only does it help you to build your portfolio
a SIP is a one step at a time, it also helps you to ride over market
volatility and benefit from 'rupee cost averaging': If the
smart move market goes up, the units you own will increase in value.
If it goes down, your next payment will buy more units.
The power of rupee cost averaging
LUMP SUM INVESTOR REGULAR SAVER
Month Unit Price Amount Units Amount Units*
(Rs.) Invested (Rs.) Bought Invested (Rs.) Bought
1 20 60,000 3,000 10,000 500
2 18 - - 10,000 556
3 14 - - 10,000 714
4 22 - - 10,000 455
5 26 - - 10,000 385
6 20 - - 10,000 500
Total invested (Rs) 60,000 60,000
Average price paid (Rs) 20 19
Total number of units bought 3,000 3,110
Value of investment after 60,000 62,200
six months (Rs)
The table above illustrates the power of rupee cost averaging. It compares the returns achieved by a lump sum investor and someone who saves
the same amount every month for six [Link] regular saver finishes with an investment that is worth more than the lump sum investor’s after
six months - even though the starting price, finishing price and average price are exactly the same. It sounds unlikely but it’s true. Check the
figures yourself. This example uses assumed figures and is for illustrative purposes only. * Fractional units ignored.
5
When saving for your future, let common sense
2. Tame stock prevail - stay focused on your financial goals
and leave the job of taming market volatility to
your SIP. The example below demonstrates how
market this happens:
volatility On October 1, 2001, two investors began
investing in a simulated equity mutual fund. One
with a SIP invested a lump sum of Rs. 1,20,000 (represented
by the red dotted line), while the other started a
SIP of Rs. 1,000 every month (represented by the
yellow line). As you can see, the value of the
lumpsum investment plummeted substantially
and stayed there for almost three years in a row
(represented by the green line). In contrast, the SIP investment experienced a smaller loss and
kept growing at a steady pace with the investor buying units at lower prices through the bear
market (represented by the blue line). Moreover, by putting aside an amount of just Rs. 1,000
every month, the SIP investor had found an affordable way to gain from the stock market.
SIP versus LUMP SUM
1000000
800000
Lumpsum
value
600000
400000
SIP value
200000 Lumpsum Source: Verity Analytics, Fidelity. Both SIP
invested and lumpsum investments are assumed to
SIP invested be made in BSE Sensex. The SIP depicted in
0 this graph is scheduled for the 1st of every
Sep-11
Oct-01
Oct-06
Apr-04
Apr-09
Jan-03
Jan-08
Jul-05
Jul-10
month, or the closest subsequent available
date. Past performance may or may not be
sustained in the future.
7
When saving for your future, let common sense
2. Tame stock prevail - stay focused on your financial goals
and leave the job of taming market volatility to
your SIP. The example below demonstrates how
market this happens:
volatility On October 1, 2001, two investors began
investing in a simulated equity mutual fund. One
with a SIP invested a lump sum of Rs. 1,20,000 (represented
by the red dotted line), while the other started a
SIP of Rs. 1,000 every month (represented by the
yellow line). As you can see, the value of the
lumpsum investment plummeted substantially
and stayed there for almost three years in a row
(represented by the green line). In contrast, the SIP investment experienced a smaller loss and
kept growing at a steady pace with the investor buying units at lower prices through the bear
market (represented by the blue line). Moreover, by putting aside an amount of just Rs. 1,000
every month, the SIP investor had found an affordable way to gain from the stock market.
SIP versus LUMP SUM
1000000
800000
Lumpsum
value
600000
400000
SIP value
200000 Lumpsum Source: Verity Analytics, Fidelity. Both SIP
invested and lumpsum investments are assumed to
SIP invested be made in BSE Sensex. The SIP depicted in
0 this graph is scheduled for the 1st of every
Sep-11
Oct-01
Oct-06
Apr-04
Apr-09
Jan-03
Jan-08
Jul-05
Jul-10
month, or the closest subsequent available
date. Past performance may or may not be
sustained in the future.
7
The truth is that no one can predict with consistent
3. Discipline success where the market will head next, not even the
experts. Hence, the key is discipline and systematic
investing helps you to become a disciplined investor.
is the key By drip-feeding your savings into the market, you make
issues like timing the market and short term volatility
irrelevant.
Is there a right time to start a SIP?
When you hear that the Sensex has hit record highs,
you may feel as concerned about starting a SIP as
investing a lump sum. On the other hand, you may feel anxious if the market hits a turbulent spot.
So how can you pin-point the best time to begin a SIP? The answer is simple: Choose any time!
But you don't need to take our word for it. The example below assumes that an investor began a
SIP of Rs 1,000 every month in a simulated equity mutual fund from the stock market’s peak of
February 2000 through March 2010. Given that this tech-driven high was followed by one of the
steepest falls in the history of the Indian stock market, conventional wisdom would not have
advised beginning an investment at this point. However, the graph below tells us quite a different
story. Two years of being mired in a bear market actually meant two years of buying units at low
prices. When the market took off in 2003, the SIP investor's patience and discipline would have
been suitably rewarded.
500,000 Starting a SIP 15% annualised
400,000 at a market peak returns
(February 2000) SIP value
300,000
Source: Verity Analytics, Fidelity. SIP
200,000 performance is based on the assumption that
investment is made in BSE Sensex. The SIP
100,000 Total depicted in this graph is scheduled for the 1st
invested of every month, or the closest subsequent
0 available date. Past performance may or may
Feb-00 Jun-02 Oct-04 Feb-07 Jun-09 Sep-11 not be sustained in the future.
9
The truth is that no one can predict with consistent
3. Discipline success where the market will head next, not even the
experts. Hence, the key is discipline and systematic
investing helps you to become a disciplined investor.
is the key By drip-feeding your savings into the market, you make
issues like timing the market and short term volatility
irrelevant.
Is there a right time to start a SIP?
When you hear that the Sensex has hit record highs,
you may feel as concerned about starting a SIP as
investing a lump sum. On the other hand, you may feel anxious if the market hits a turbulent spot.
So how can you pin-point the best time to begin a SIP? The answer is simple: Choose any time!
But you don't need to take our word for it. The example below assumes that an investor began a
SIP of Rs 1,000 every month in a simulated equity mutual fund from the stock market’s peak of
February 2000 through March 2010. Given that this tech-driven high was followed by one of the
steepest falls in the history of the Indian stock market, conventional wisdom would not have
advised beginning an investment at this point. However, the graph below tells us quite a different
story. Two years of being mired in a bear market actually meant two years of buying units at low
prices. When the market took off in 2003, the SIP investor's patience and discipline would have
been suitably rewarded.
500,000 Starting a SIP 15% annualised
400,000 at a market peak returns
(February 2000) SIP value
300,000
Source: Verity Analytics, Fidelity. SIP
200,000 performance is based on the assumption that
investment is made in BSE Sensex. The SIP
100,000 Total depicted in this graph is scheduled for the 1st
invested of every month, or the closest subsequent
0 available date. Past performance may or may
Feb-00 Jun-02 Oct-04 Feb-07 Jun-09 Sep-11 not be sustained in the future.
9
The sooner you begin investing, the more time
4. Start early - your money will have to grow because the
power of compounding works on your investment.
If you delay, you will almost certainly have to
add more invest much more to achieve a similar result.
power to your The example below shows you how you can gain
from compounding and multiply your money,
money month after month, year after year.
The difference time can make
If you started investing Rs. 5,000 a month on your 40th birthday, in 20 years’ time you would have
put aside Rs. 12 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs.
25,52,994 when you reach 60.
If you started investing ten years earlier, your Rs. 5,000 each month would add up to Rs. 18 lakhs
over 30 years. Assuming the same average annual growth of 7%, you would have Rs. 58,82,545
on your 60th birthday - more than double the amount you would have received if you had started
ten years later! The bottom line - your investments gain most from compounding when you have
time on your side.
11
The sooner you begin investing, the more time
4. Start early - your money will have to grow because the
power of compounding works on your investment.
If you delay, you will almost certainly have to
add more invest much more to achieve a similar result.
power to your The example below shows you how you can gain
from compounding and multiply your money,
money month after month, year after year.
The difference time can make
If you started investing Rs. 5,000 a month on your 40th birthday, in 20 years’ time you would have
put aside Rs. 12 lakhs. If that investment grew by an average of 7% a year, it would be worth Rs.
25,52,994 when you reach 60.
If you started investing ten years earlier, your Rs. 5,000 each month would add up to Rs. 18 lakhs
over 30 years. Assuming the same average annual growth of 7%, you would have Rs. 58,82,545
on your 60th birthday - more than double the amount you would have received if you had started
ten years later! The bottom line - your investments gain most from compounding when you have
time on your side.
11
Fidelity has a long history of helping people meet their
We're
financial goals. We have a range of brochures about our
products and services and a number of free guides on
key investment topics. Please contact us if you would like
The Fidelity
here copies of any of these publications or more information.
to help
SIP Guide
[Link]
1800 2000 400
This brochure is for the purpose of providing information about Fidelity and general information about mutual funds. Risk Factors: Mutual funds,
like securities investments, are subject to market risks and there is no guarantee against loss in the scheme or that the scheme’s objectives
will be achieved. • As with any investment in securities, the NAV of the Units issued under the scheme can go up or down depending on various
factors and forces affecting capital markets • Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future
performance of the scheme. Please read the Scheme Information Document and Statement of Additional Information carefully before investing.
Statutory: Fidelity Mutual Fund (‘the Fund’) has been established as a Trust under the Indian Trusts Act, 1882, by FIL Investment Advisors (liability
restricted to Rs. 1 Lakh). FIL Trustee Company Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the
Trustee to the Fund. FIL Fund Management Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the
Investment Manager to the Fund. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and F symbol are trademarks of FIL
Limited. CI02336